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PRECIOUS-Gold holds near 3-1/2 week low as investors opt for riskier assets

* Spot gold may break a support at $1,272/oz - technicals

* Silver flat after hitting 8-wk low on Thursday

(Updates prices, adds quotes) Dec 1 (Reuters) - Gold on Friday steadied near a 3-1/2 week low touched in the previous session, as investors opted for riskier assets amid a surge in U.S. equities and expectations of an interest rate hike by the Federal Reserve later this month.

Spot gold was flat at $1,274.34 an ounce at 0457 GMT.

On Thursday, it fell 0.7 percent to touch its lowest since Nov. 6 at $1,270.11. The yellow metal is down 1 percent for the week.

U.S. gold futures were nearly unchanged at

$1,273.60. "There is a positive mood in the equity market. The U.S. dollar has been strong too (overall). So, it is not beneficial for investors to invest in the commodity market now," said Dick Poon, general manager at Heraeus Metals Hong Kong Limited. "People are focusing on stocks in the short-term and are also awaiting an interest rate hike by the U.S. Federal Reserve." Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. On Wall Street overnight, major indexes marked gains with the S&P 500 SPX hitting a record closing high and the Dow Jones

industrial average topping the 24,000 mark for the first

time. "It has been a slow climb up the stairs over the past month, followed by a leap out of the top floor window for (gold) prices to crash," said Jeffrey Halley, senior market analyst with OANDA. "It should be of concern to longer-term bulls and underlines the fragile nature of gold's pricing at the moment in the absence of any geopolitical safe-haven factors. With monetary conditions set to tighten next year in many parts of the world, gold may find fewer friends as we head into the last month of the year."

The dollar index , which gauges the greenback against

a basket of six major rivals, was down 0.1 percent as the market endured the wait for a vote on a U.S. tax reform bill. The Republican tax overhaul stalled on a procedural issue as the Senate debated the legislation late into Thursday and adjourned, putting off any votes until Friday morning. It was unclear if a decisive vote on the bill would occur then.

Spot gold may break a support at $1,272 per ounce and fall more towards the next support at $1,263.35, as suggested by a Fibonacci retracement analysis and a wedge, according to Reuters technical analyst Wang Tao.

In other precious metals, silver was little-changed

at $16.42 after matching an Oct. 6 low of $16.30 an ounce in the previous session. It was down 3.2 percent for the week.

Palladium rose 0.3 percent to $1,009.85 and was up 1.3 percent for the week. Platinum was down 0.1 percent

at $940.10 an ounce and fell 0.3 percent for the week.

(Reporting by Vijaykumar Vedala and Arpan Varghese in Bengaluru; Editing by Michael Perry and Vyas Mohan)